The Anglo-Australian company will also reduce the number of operated rigs in the onshore US business from seven to five in the March 2016 quarter, and said it was reviewing investment and development plans for the remainder of the 2016 financial year.

Investors, however, seemed to welcome the decision, pushing up its struggling shares more than 5% to $A15.70 in early trade in Australia on Friday.

“Oil and gas markets have been significantly weaker than the industry expected. We responded quickly by dramatically cutting our operating and capital costs, and reducing the number of operated rigs in the onshore US business,” chief executive Andrew Mackenzie said in a statement.

“While we have made significant progress, the dramatic fall in prices has led to the disappointing writedown announced today.”

Oil prices fell to a 12-year low of $US30 a barrel this week, compared with $100in mid-2014 as weakening global demand and a supply glut took their toll.

BHP said it has also reduced its medium and long-term gas price assumptions. However, its long-term price assumptions continue to reflect the market’s attractive supply and demand fundamentals.